Switzerland Under Fire for Tax Evasion Schemes
Warning from US Senate Finance Committee Chairman and Congressman Demands Action Against Swiss Banks
A scathing letter sent by US Senate Finance Committee Chairman Ron Wyden and Congressman Don Beyer to Attorney General Merrick Garland has sparked concerns among Swiss banks, urging them to crack down on tax evasion schemes and hold individual bankers accountable for their involvement in criminal activities.
Joint Letter Calls for Immediate Action
The joint letter, dated May 18, 2023, demands that the Department of Justice (DOJ) take immediate action to curb ongoing tax evasion by US citizens facilitated by Swiss banks. Wyden and Beyer are urging the DOJ to:
- Rigorously police employee practices
- Conduct continuous monitoring and auditing to ensure compliance with US reporting obligations
Credit Suisse’s Past Misdeeds
The warning comes on the heels of a recent investigation into Credit Suisse, which admitted in 2014 to helping US taxpayers file false tax returns and concealing offshore assets from the IRS. The bank paid a $1.13 billion criminal fine and agreed to close accounts of clients not in compliance with US reporting obligations.
Investigation Reveals Widespread Tax Evasion
However, an investigation led by Senator Wyden found that Credit Suisse may have violated its plea agreement by continuing to engage in cross-border tax evasion. The report revealed:
- “Voluminous records” detailing how senior bankers helped a US businessman conceal $220 million in offshore accounts
- Failure to report secret offshore accounts belonging to a family of dual US-Latin American nationals
Concerns Over Other Swiss Banks’ Compliance
The investigation has sparked concerns that other Swiss banks may have similarly violated their agreements with the DOJ. Wyden is urging enforcement agencies to step up investigations into FATCA violations.
IRS Plans to Increase Audits
The IRS has announced plans to increase audits related to tax evasion schemes, sparking fears among Swiss banks that they may be targeted next.
Experts Warn of Consequences for Non-Compliance
Experts warn that Swiss banks must take immediate action to ensure compliance with US disclosure requirements under FATCA, including:
- Complete disclosure of cross-border activities
- Detailed information on account-by-account basis for accounts in which US taxpayers have a direct or indirect interest
- Cooperation in treaty requests for account information